The Advanced Finance Program
Course Code: FA23
►Course Objective
- How are business strategies developed?
- How does financial management support strategic development?
- What is the exact nature and scope of the business problems to be analysed?
- Which specific variables, relationships, and trends are likely to be helpful in analysing problems?
- Are there possible ways to obtain a quick ‘ballpark’ estimates of likely outcomes of decisions?
- How precise an answer is necessary with regards to problem-solving and decision-making?
- How reliable are available financial data, and how is uncertainty and risk likely to impact on the outcomes of decisions?
- In economic and financial analysis, what are the implications and relative importance of cash flow as distinct from accounting profit?
- What limitations are inherent in financial data and the key financial statements, and how will these affect financial analysis?
- How important are qualitative judgments in the context of decision-making?
►Target Audience
- General Management
- Sales and Marketing
- Estimating and Costing
- Operations
- Engineering
- Project Management
- Procurement
- Logistics
- Asset Management
- Human Resources
- And any other financial and non-financial professionals that need or wish to understand the financial aspects of the strategic decision-making process.
►Course Outline
DAY 1
An Introduction to the Financial Markets
- An introduction to the equity markets
- IPO
- Market Indices
- International Equity Market Links
- An introduction to bond markets
- Long Term versus Short Term
- Treasury versus Corporate
- Types of Bond
- An introduction to the FX market
- The spot and forward market
- Exchange Rate trends and linkages
- Carry Trades
- An introduction to the Derivatives Market
- Futures
- Options
- The link between risk and return
DAY 2
Evaluating Investment Opportunities
- The Markowitz model of Portfolio Risk
- The Capital Asset Pricing Model
- A practical application of the CAPM to a range of companies
- The time value of money and discounted cash flow techniques
- The Gordon Growth Model
- A practical application of forecasting dividends
- Determining the Cost of Debt
- The weighted average cost of capital (WACC)
- The Ameritrade Case
- Investment Appraisal using the Net Present Value approach
- The importance of the cost of capital
- Scenario analysis
- Payback and adjusted Payback
- The Internal Rate of Return (IRR) approach
- A practical application of the IRR approach
- Pitfalls in using the IRR approach
- Real Options
DAY 3
A Walk through an Annual Report
- The Balance Sheet
- The Income Statement
- The Cash Flow Statement
- Ratio Analysis
- A practical application of Ratio Analysis
- Apple v Microsoft
- Next v Tesco
- Easyjet v British Airways
- Forecasting Sales
- The cost of sales approach
DAY 4
The Corporate Financing Decision
- Financial Leverage
- Modiglianni and Millers Theory of Capital Structure
- The Risk of Bankruptcy
- The Optimal Capital Structure
- The Dividend Decision
- The clientele effect
- The taxation effect
- The principal agent problem
- The market for Corporate Control
DAY 5
Risk Management
- Hedging Exchange Rate risk using
- The forward market
- The options market
- Zero cost collars
- Hedging commodity price risk using
- Options
- Futures
- Practical Application of airlines hedging fuel price risk- the importance of correlation
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